Have you taken the loan? And due to COVID-19 or any other situation, you are unable to pay off the debt. Debt collection agencies asking you to return money in those situations can be exhausting. But you should be aware that for how long they can try to collect a debt and until when the collectors or the collection agency can bring action against you for not paying the debt.

What is a Collection Agency?

A collection agency is a third-party entity that is incorporated to collect dues or debts. When a person stops making payment against the loan, and the funding institution does not believe that money will be paid, the funding institution may transfer the file to the collection agency for collecting the debt. These agencies have the legal right to pursue any legal action against the person owing the debt.

General Limitation of Debt Collection in Canada:

Canada’s laws provide that a collection agency has a legal right to bring an action against the power owing to debt within six years of the debt last being acknowledged. However, the laws in the provinces are different. 

General Limitation of Debt Collection in Ontario:

The limitation period in Ontario is lesser than that in the federal laws. The rules in Ontario provide that a Collection agency cannot bring legal action after two years. However, if any payment for the debt is made after two years or the debt is even acknowledged, the two years limitation period starts again. 

It should be noted that this provision does not remove the debt from your shoulders. The debt remains in your credit report for at least six years, and you will continue owing to the debt even after two years. There will become no threat of legal action by the collection agency. 

Does the Collection Agency still contact you?

Know that you have rights, and the collection agency should respect your rights. If you are trading with:

  • A federally regulated financial institution;
  • A debt collection agency work for a federally regulated financial institution. Contact the Financial Consumer Agency of Canada.
  • If your creditor sold your bet to a collection agency and you want to make a complaint about the agency’s debt collection practices. Contact the consumer affairs office of Ontario.

About Juzkiw Law

At the Juzkiw law firm, we have vast legal knowledge and can help you deal with debt collection law issues. We advise individuals and companies in all aspects of the law.

If you need legal assistance, contact us immediately at 647-699-7984 to ensure that your rights are fully protected. We understand the problems you are experiencing and will work hard to get the best possible solution.